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Set up Special Displaced Workers Fund, urges PSM
Published:  Oct 21, 2015 2:45 PM
Updated: Oct 22, 2015 12:55 AM

A special fund catering to workers who are sacked or displaced due to the closure of the companies employing them should be set up by the Human Resources Ministry, Parti Sosialis Malaysia (PSM) proposed today.

The special fund, called Special Displaced Workers Fund, should be set up to assist those who are not provided compensation by employers who have gone bankrupt, PSM secretary-general A Sivarajan said in a statement.

Sivarajan said the fund should be managed by the Social Security Organisation (Socso).

“PSM proposes that the government channels an initial contribution as a start-up for the fund, while monthly contributions from employers and workers should also be channelled into it. The first payment can be given 30 days after the workers are laid off.

“Besides this, the retraining of the affected workers should be done under the Human Resource Development Fund. We are hopeful that the government will be able to make an initial allocation to the fund in the 2016 budget,” Sivarajan ( photo ) said.

He also proposed that the government and Bank Negara also support the affected workers by instructing commercial banks to suspend payments on the housing loans of these workers for six months, and followed with a re-scheduling of the loans.

Sivarajan also suggested that migrant workers be given compensation for the wages they are entitled to until they complete their work contracts.

Sign of economic crisis

He noted that based on statistics from the Labour Department, a total of 7,130 employers had laid off 222,986 workers between 2003 and 2012.

Of the total sum of RM1.67 billion that was supposed to be paid out to workers as unpaid wages and compensation, only RM1.27 billion was paid out, Sivarajan said.

“On average, 31.4 percent of the workers who lose their jobs or are sacked do not receive any compensation from their employers who have gone bankrupt or do not have the financial resources to pay.”

He said when employers went bankrupt, their workers have to face the prospect of their wages being delayed and chances of compensation payment, as stipulated under the Workers Act 1955, became very slim.

This is also because under the Companies Act 1965, wages and compensation are classified as 'unsecured credit' and those prioritised to get the funds from the affected company include the liquidator and petitioners.

Sivarajan said the laying off of workers was a sign of economic crisis, with uncertainities in the country and around the world contributing towards it.

The establishment of the Special Displaced Workers Fund, he said, would ensure the safety of workers who lost their jobs due to their companies shutting down.

For this purpose, Sivarajan said, PSM has embarked on a nationwide campaign to create awareness on the formation of such the fund.

“We are hopeful that the government will, in its 2016 budget this Friday, provide a special allocation for this fund to reduce the rising cost of living,” he added.

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